The following statement was published on the club website this evening 21:44 12th February 2016 Cardiff City Football Club is pleased to announce the following financial information, as confirmed on 11th February 2016 by Tan Sri Vincent Tan. During the 2014/15 financial year, Tan Sri Vincent Tan waived £13 million of the debt owed to him by the Club and further converted £3 million of debt into equity in accordance with the Financial Fair Play regulations. In total, therefore, for the year ended 31st May 2015, £16 million of Club debt was cleared. The 2014/15 accounts also show that the Club and the Group traded profitably. For the financial year 2015/16, Tan Sri Vincent Tan will convert an additional £68 million from debt into equity and waive a further £10m of the debt owed to him. The remaining debt, amounting to approximately £40 million following the above waiver and debt to equity conversion, will be converted from debt into equity over the next five years at the current maximum permitted Financial Fair Play regulated figure of £8 million per year. The 2014/15 audited Financial Statements will be filed at Companies House on Monday, 15th February 2016. On behalf of Cardiff City Football Club, Chief Executive Officer, Ken Choo said of the above statement: “We’d like to thank Tan Sri Vincent for his generosity and for visiting us personally to make this significant announcement. “Cardiff City Football Club can look forward with a renewed level of optimism and financial stability, as a result of his kind gesture.” I am sure we will all eagerly look forward to seeing the accounts and for BfB'S expert analysis
Nice to see you stayed up late to post that BT. I will get my analytical hat on ready for a thorough review of the financial once published. Or not..... Nevertheless great news on VT's financial commitment. Looks like the delay in capitalising loans was down to the stand off with Hammam. Now resolved VT is honouring his long standing promise. As a result the club's balance sheet will look much healthier. Let's hope these will satisfy FFP and we get the embargo lifted in the summer. A key statement above is that the club and group traded profitably in 2014/15. The parachute money will have aided this but it also shows the financial constraints Slade has had to work under. All we need now is for him to move his off field successes on to the pitch.
Some interesting comments there....... are the write-offs and conversions somehow related to FFP? Indeed, is the big conversion this year related to the already failure to meet FFP? especially since future conversions are specifically calculated not to breach FFP?
FFB Tan always said he would convert loans into equity - shares. This putting a much more positive spin on the balance sheet. I have been making comments on his lack of action to follow up his promise for sometime. It looks like it was very much linked to the ongoing Hammam situation. i.e. is Langston = Hammam - now confirmed - and now that has been resolved VT feels comfortable in making good his promise. I don't know exactly how we failed FFP but if the change from loans to shares and a profitable 2014/15 is correct then we should certainly be within FFP guidelines and have the transfer ban lifted for the summer. There are probably some ratio and numerical hurdles to get over but the above 2 facts together should, I hope, put us on the right side of the fence. The short answer to your questions is yes to both but the removal of all debt by 2020, within current FFP rules which, interestingly, no longer apply to Prem clubs (the bigger get bigger any any means), i.e. £8m per year, can only be good for the future financial health of the club. That in turn begs another question though. Does the club have to be totally self financing going forward? If VT honours the commitment to clear £8m of existing loans per year by transfer to shares or other means, will he continue to put money into the club (and by what means) or do we have to survive on a strict income versus expenditure basis. That could put a bit of a brake on our ability to sign better players and improve on the pitch - to bring fans back to the club. Bit of a catch 22 situation there. As ever, time will tell.
